OIC and EFRAG issue the Feedback Statement ‘Accounting for Business Combinations under Common Control’

The OIC and the EFRAG have published today the Feedback Statement ‘Accounting for Business Combinations under Common Control’. The Feedback Statement has been prepared for constituents to consider the analysis of comment letters received, together with EFRAG’s and OIC’s responses to the issues raised by respondents and the way they have decided to further develop the project.

OIC and EFRAG have finalised the feedback statement that they jointly prepared as a result of the comments received on the Discussion Paper ‘Accounting for Business Combinations under Common Control’, which was published in October 2011. In the public consultation to the Discussion Paper, comment letters were received from commentators in Europe, but also from a wider audience. This input has demonstrated the importance of, and interest in this initiative.

Most of the respondents welcomed the Discussion Paper as an introduction to an important debate; however, they raised a number of concerns and suggested that more work was needed. In this respect, OIC and the EFRAG agreed that further work in their overall project on Business Combinations under Common Control (BCUCC) would encompass the following:

- Review real- life examples to see whether they provide a basis for categorizing BCUCC into different types of transactions, for which different accounting treatments should apply. If this is successful, indicators of difference in economic substance may be eventually drawn from this exercise; and
- Define what a business combination under common control is.

OIC and EFRAG would like to thank all the respondents to the Discussion Paper for their contribution hopefully to influencing the development of IFRS on this issue.

Please find herewith attached the feedback statement.